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What went wrong?

EXW where the buyer couldn't clear the export

An Istanbul distributor sends its own truck to collect machine tools in Stuttgart under EXW. The truck waits — nobody can file the EU export declaration.

Reviewed by: pending — expert review by TermVisa's editor (retired VP, international transport) in progress · Last updated

The deal

EXW Stuttgart Incoterms® 2020

Seller
Machine-tool manufacturer, Stuttgart, Germany
Buyer
Machinery distributor, Istanbul, Türkiye
Transport
Road — the buyer's truck collects in Stuttgart and drives to Istanbul

The buyer, Bosphorus Makina (fictional), a machinery distributor in Istanbul, Türkiye, buys four machine tools from the seller, a manufacturer in Stuttgart, Germany, under EXW Stuttgart Incoterms® 2020, because the EXW price is the lowest. Transport is by road: the buyer's Turkish trucking company collects the crates at the plant and drives them to Istanbul.

What happened

The export declaration cannot be filed with the buyer as exporter: EU customs rules generally require the exporter to be established in the EU, and the Istanbul company is not.

The trucker asks the seller to act as exporter. The seller answers that under EXW export is the buyer's job, and hesitates to take responsibility for a declaration it does not control. The loaded truck waits three days, with waiting charges running.

The seller finally agrees, but because it had no proof of export when it invoiced, it charged German VAT on the sale, refundable only once proof of exit arrives. The buyer's cash is tied up for weeks.

Where the risk really sat

▶ Seller: Stuttgart, Germany Buyer: Istanbul, Türkiye ■ 1 Loading at the seller'spremises Buyer 2 Export clearance Buyer 3 Main carriage (road) Buyer 4 Import clearance, dutiesand taxes Buyer 5 On-carriage to the namedplace Buyer BuyerBuyerBuyerBuyerBuyer Who pays Who bears the risk ⚠ Risk passes to the buyer here ▶ Seller: Stuttgart, Germany Pays Risk 1 Loading at theseller's premises Buyer 2 Export clearance Buyer 3 Main carriage (road) Buyer 4 Import clearance,duties and taxes Buyer 5 On-carriage to thenamed place Buyer BuyerBuyerBuyerBuyerBuyer ⚠ Risk passes here ■ Buyer: Istanbul, Türkiye
  • Seller
  • Buyer
  • Depends on contract / carrier or port practice
  • Point where risk passes

⚠ Under EXW the buyer carried the risk — and the export paperwork — from the moment the crates were ready at the plant.

  1. Loading at the seller's premises — Buyer: Buyer's truck loads at the plant
  2. Export clearance — Buyer: EU export declaration — the buyer's job under EXW, but it cannot be the exporter
  3. Main carriage — Buyer: Truck Stuttgart → Turkish border, transit through other countries
  4. Import clearance, duties and taxes — Buyer: Turkish import clearance, duties and taxes
  5. On-carriage to the named place — Buyer: To the Istanbul warehouse

Why it went wrong

  • EXW puts export clearance on the buyer, but whether a foreign buyer can be the exporter is decided by the export country's law — and in the EU it generally cannot.
  • The lowest price hid the cost of the export problem, truck waiting time and the VAT cash-flow hit.
  • The seller's VAT exemption depended on export proof it had no control over.

✓ Lesson learned

When buying from a country where you cannot be the exporter (the EU, the UK and others), buy FCA instead of EXW: the seller clears the export, keeps its VAT evidence, and your truck still collects at the seller's door.

  • Agreed term should have been: FCA Stuttgart (seller's plant) Incoterms® 2020.
  • Check TermVisa's EXW page for the seller's country before accepting an EXW quote.
  • Ask the seller for its FCA price — the difference is usually small compared with a blocked export.

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